The U.S. SEC is investigating whether Coinbase has inflated its user numbers

ChainCatcher news, according to The New York Times, shortly after taking office, U.S. President Trump received good news for the largest cryptocurrency exchange in the U.S., Coinbase (COIN.O): the U.S. Securities and Exchange Commission (SEC) has withdrawn its lawsuit accusing it of illegally promoting digital currencies to the public. However, this is far from the end of the company's legal disputes.

According to four informed sources, the SEC is investigating whether Coinbase has inflated its user numbers in past disclosure documents—this investigation, which began under the Biden administration, is still ongoing during Trump's term. The previously undisclosed investigation focuses on Coinbase's claim of having over 100 million "verified users" in its securities filings and promotional materials. This data appeared in the 2021 listing documents but was no longer referenced by the company two years later. Two informed sources stated that Coinbase has been in ongoing communication with the SEC this year and has hired Davis Polk & Wardwell LLP to assist in its response.